China and its Discontents

The Financial Times’ recent article on China, “Beijing Considers Stronger Foreign Ties,” was a fascinating peak into possible Chinese foreign policy strategies into the future. For the past thirty years China has chosen non-alignment and non-intervention in other states’ internal affairs, largely because China was still too weak for stronger engagement and was wary of other states intervening in China’s own internal affairs. But FT speculates that China’s latest ploy, involving Cambodia blocking a final statement from the latest ASEAN Summit at Beijing’s behest, represents a new Chinese foreign policy of stronger alliances. FT goes even further, throwing out the possibility that China will also seek stronger military alliances, quoting Yan Xuetong, dean of the Institute of Modern International Relations at Tsinghua University:

“We live in an international order dominated by the US’ military alliances,” he said. “China is not offering its neighbours security guarantees, so as China is rising, fears are emerging among them as to what our intentions might be.”

Two problems arise out of the strategies detailed in the FT article. First, the Cambodia ploy is, in the words of State Department spokesperson Victoria Nuland, a “divide and conquer” strategy. Successful alliances that abide by international norms don’t generally consist of one-sided exploitative relationships that foil mediation in disputes and anger the rest of the international community.

Second, if China were to offer a string of “security guarantees,” to not only its next-door neighbors but to states as far away as Sri Lanka, Pakistan, or even in Africa, it would have to actually back them up militarily. This is troubling, because it represents a strong departure from traditional Chinese military doctrine and capabilities. The PLA’s historical mission and capabilities have been geared towards defending its own territory and a large swath of its maritime claims within the First Island Chain. To extend its reach, it would need to develop a forward-deployed navy similar to the U.S. Navy. This would be quite a threatening move, and would overturn many of the assumptions I made in my previous post on AirSea Battle.

Ultimately, the question the Chinese need to ask is: what’s the point? Who would China be protecting a state like Pakistan from? India? Does China really want to get that deeply involved in such a messy and dangerous relationship? What are China’s real interests? I would posit that China is/should be mainly concerned with commercial shipping and its growing energy requirements. And the type of China-bloc envisioned by FT and Yan Xuetong is simply unnecessary to guarantee those interests. Yes–China will probably increase its naval presence in the Indian Ocean in the coming decades; but it should focus on securing free trade and a strong international system, not on alliances with client states that will blow up in their faces.

Writing in The National Interest website, James Holmes gives a characteristically excellent explication of the still officially-undefined AirSea Battle Concept, the theory behind A2/AD, and U.S. and Chinese naval deficiencies. From a military perspective, Holmes is completely on point. I gripe, however, with some of the implications of his article if taken from a political perspective:

1) The title is “Preparing for a War with China” (subtle)

2) The off-handed throw-away line “From a political standpoint, war with China is neither inevitable nor all that likely.”

3) Holmes’ assumption that the PLAN wants or needs to operate in the far seas at the same level of the USN.

I gripe because at some point tactics have to be constrained by some sense of strategy and political purpose. I don’t see that happening with the developing AirSea Battle Concept. DoD should absolutely prepare for the worst-case scenario–to do otherwise would be folly. But don’t political considerations deserve more than a one-sentence dismissal?

According to the Defense Strategic Guidance released in January, U.S. interests lie in maintaining a “rules-based international order that ensures underlying stability and encourages the peaceful rise of new powers, economic dynamism, and constructive defense cooperation,” and protecting access to the global commons.

The official rhetoric coming from China is hardly that different. According to China’s most recent National Defense whitepaper published in 2010, China seeks to promote “economic development and regional stability” in the Asia-Pacific. Furthermore, the paper identifies China’s main national security interests as “preserving China’s territorial integrity and maritime rights and interests…” and “safeguarding national sovereignty.” Far-flung military excursions or humanitarian interventions are explicitly left off the table.

Should we put any stock in what the Chinese government says? We have to on some level. We can’t complain in the Defense Strategic Guidance that “the growth of China’’s military power must be accompanied by greater clarity of its strategic intentions in order to avoid causing friction in the region,” and then ignore when China attempts to clarify its strategic intentions.

Ultimately, China fighting a war with the U.S. is not in Chinese interests and would be completely counterproductive, undermining their economy and growth. China currently relies on the U.S. Navy to preserve its access to oil and commercial shipping in the Indian Ocean, and its economy would crumble without international trade. Economic warfare between China and the U.S. would leave both hobbled; the resulting “mutually assured destruction” of this era would be nearly as bad as the M.A.D. of the nuclear era.

It is also hard to believe that the Chinese have an interest in operating in the far seas anywhere near the capability of the USN. They have very little to gain from it. First, it currently has zero capability to engage in wars outside of its periphery. Second, such an aspiration contradicts the prime aspect of their foreign policy: non-intervention in other states’ internal affairs. The wars it has fought in the 20th century and will continue to fight in the future are about stability, integrity, and sovereignty (as the 2010 National Defense whitepaper acknowledges), fought close to China’s borders (historically, Korea, India, Vietnam, and in the future, countries around its maritime claims). The A2/AD strategy is to win a war in the South China Sea, not in the far seas. As even James Holmes notes, Chinese A2/AD capability is premised on China’s ability to whittle away at USN forces before they get close to China, using naval assets close to shore and numerous land-based jets, missiles, and other assets. The PLAN has conducted some operations away from the near seas recently (evacuation of Chinese citizens from Libya and participation in an international taskforce hunting Somali pirates), but it is not credible to assert that China has the desire or capabilities to move more aggressively into the far seas.

As Cheng Li and Kenneth Lieberthal note in their Brookings report “Addressing U.S.-China Strategic Distrust,” “[AirSea Battle/JOAC and China’s ‘securing the near seas’ concept] are increasingly being couched in terms that can easily justify escalating military expenditures as both militaries attempt to achieve basically unattainable levels of certainty.” They conclude that both sides will have to ask the uncomfortable question of “what array of military deployments and normal operations will permit China to defend its core security interests and at the same time allow America to continue to meet fully its obligations to its allies and friends in the region?” The primary solution to this deadlock, the two authors say, is “mutual restraint on new capabilities,”–involving new dialogues and direct governmental and military exchanges designed to prevent an arms race.

On the U.S. side, the rhetoric surrounding the AirSea Battle concept seems untempered by these very basic political and strategic considerations raised by Cheng Li and Kenneth Lieberthal. Echoing Thoreau, our rapidly developing military capabilities seem only to be “improved means to an unimproved end.” It is certainly not practical for the U.S. to restrain itself unilaterally–but DoD and State should be actively clarifying its intentions and working with the Chinese to restrain the potential for conflict, just as we demand that the PLA and MFA do the same.

The Chinese have also at times acted belligerently: the current situation in the South China Sea and the Diaoyu Islands—China pushing for complete territorial control against a number of states friendly to the U.S.—does not advance the stability China prioritizes. China’s strategic necessity to secure domestic sources of oil and natural gas to hedge against their current dependence on the Middle East is butting up against their other priority to maintain stability. This confused strategy must also be clarified.

The U.S. should, however, continue the rest of our “Pivot to Asia” agenda, including engagement in multilateral institutions and diplomatic, security, and economic partnerships, and other parts of the Defense Strategic Guidance, such as, “develop[ing] innovative, low-cost, and small-footprint approaches to achieve our security objectives, relying on exercises, rotational presence, and advisory capabilities.” These kinds of initiatives are less-threatening and appropriate measures in an era of fiscal restraint.

The PLA is developing PLAN, 2nd Artillery Corps, and space-based capabilities that should and do worry the U.S. government. In addition, the DoD should develop the requisite capabilities to secure our interests. But before this rising competition gets out of hand and evolves into something neither side wants, political leadership on both sides of the Pacific need to work out each country’s future position in relation to one another.

In another time and against a different competitor, George Kennan once said: “[the US-Soviet arms race] has no foundation in real interests–no foundation, in fact, but in fear, and in an essentially irrational fear at that. It is carried not by any reason to believe that the other side would, but only by a hypnotic fascination with the fact that it could. It is simply an institutionalized force of habit. If someone could suddenly make the two sides realize that it has no purpose and if they were then to desist, the world would presumably go on, in all important respects, just as it is going on today.” (ital original) What a country says ultimately determines how they act, and vice versa, how a country acts inevitably shapes the political discourse and constrains political choice. Preparing for a future war with China without clarifying our fundamentally peaceful aims makes war more inevitable. The U.S. needs to break that “inevitable cycle.”

The Global Times published an op-ed yesterday that “offered support” for the actions of Chinese activists landing on the Diaoyu Islands, but to my relief stated clearly that “Chinese need to be clear that China cannot retrieve the Islands now. This would mean a large-scale war, which is not in China’s interests,” and that declining to send PLAN ships to escort activists to the Diaoyu Islands does not indicate China’s weakness.

This rhetoric stands in sharp contrast to the overly nationalistic op-ed published a month ago (that I also commented on around the same time), which called on China to challenge Japan’s sovereignty over Okinawa as a psychological ploy to capture the Diaoyu Islands. It is encouraging that Chinese state media is explicitly acknowledging that going to war (of whatever magnitude) over a few piddling pieces of rock is not in their national interests.

I can only hope that they will extend this message to also include the various islands and shoals in the South China Sea. Certainly the strategic calculus is mostly the same–conflict with either Japan or any of the states surrounding the South China Sea would not only severely disrupt trade and shipping, but would also inevitably involve the United States.

According to the Financial Times, the Global Times recently published an editorial calling for the Chinese government to revisit the sovereignty of Okinawa as part of the ongoing Senkaku/Diaoyu Islands dispute between Japan and China. China might have good strategic reasons for wanting an independent Okinawa given that the U.S. based nuclear missiles at Okinawa during the Cold War, which were aimed at Beijing and Shanghai (before the U.S. was aware of the Sino-Soviet Split). But the nationalists referred to in the FT article neglect the strategic dimension for the historical, justifying their position instead on the fact that Okinawa was a Chinese tributary state in the 15th Century.

Of course, this is just one instance in which China has used historical artifacts to justify its claims in the many territorial clashes it has with its neighbors. Perhaps the best known instance of this tactic is China’s nine-dash line claim of sovereignty over nearly the entirety of the South China Sea. China’s justification of the nine-dash line is an exercise in studied ambiguity. The territory within the line was first claimed only in 1947 by the then Nationalist government. The PRC continued the Nationalist argument in two ways: 1) Claiming the entire South China Sea and all islands therein using terms such as “sovereign” or “historic” waters that are unsupported by the UN Convention on the Law of the Sea (UNCLOS), and 2) Claiming the islands themselves as a basis to claim jurisdiction over territorial waters and exclusive economic zones (EEZ) around those islands, even though EEZs cannot be claimed around islands which support no human habitation or economic activity (which includes most of the islands in question, many of which are little more than bare rocks). China’s extralegal claims not only complicate access rights to fishing and resource extraction, but could also impede the freedom of navigation for the U.S. Navy and others.

China’s claims are dubious on a number of other grounds. To begin with, China’s borders have varied wildly over the course of millennia, and its territorial claims have changed in a much shorter timeframe. As Peter Dutton at the U.S. Naval War College notes, China, Vietnam, the Philippines, and Malaysia have historically all shared access to the South China Sea. Furthermore, even if Beijing’s argument concerning history and tributary states were to stand, China is hardly the only country to have lost former territories over the course of time—most European countries once ruled over areas far beyond their current borders. In this context, China’s claims are no different than modern-day Great Britain laying claim to France because of the House of Plantagenet, or Spain claiming nearly all of Latin America because of its colonial past. Indeed, according to Beijing’s logic, Mongolia can claim the Chinese homeland as its own.

Returning to the Global Times op-ed (which appears to have only been published in Chinese, not English), it is clear that the editorial is mainly about the Diaoyu Islands, not Okinawa. The op-ed proclaims: “In China’s struggle over the Diaoyu Islands problem, Japan does not have any hope of winning. China has sufficient resources and means, and enough official and public will to confront Japan over the Diaoyu Islands,” continuing with a four-point bulletin on how to do so (which includes increasing China’s naval presence in the area and enlisting the help of the Taiwanese). And then at the very end, the editorial mentions “revisit[ing] Okinawan sovereignty”—but it seems like the author (Hu Xijin, perhaps?) only really means for it to be a psychological ploy to “curb Japan’s attitude over the Diaoyu Islands.

But this is all your average, every-day kind of talk among nationalists in China. What was really surprising was the final conclusion: “Of course, China does not have to actively make life difficult for Japan and squeeze China and Japan into a confrontation at the point of a bull’s horn. China doesn’t need Japan to be friendly—it only has to play out the results of its chess game with Japan, and be bold enough to use its strength to bring Japan to its senses…After a few rounds, Japan will reconsider its proper behavior.”

Chinese nationalists can’t possibly believe this. Calling for irrational and provocative military action is one thing—but expecting Japan and probably the rest of the Western Pacific to react as tributary states of yore? This is a serious misappraisal of the intentions of those countries involved with China in territorial disputes. This sort of thinking, if anyone in power actually believes it, will not only detonate what little cooperation on territorial disputes that still exists, but might actually lead to military conflict. This sort of hubris isn’t unique to China—it seems pretty similar to the Bush administration’s prediction that the Iraqis would ‘greet us as liberators’ in 2003. But it didn’t belong in any government’s rhetoric then and it doesn’t now.

The driving force behind the U.S. deficits and China’s surpluses lies not in exchange rates but in structural factors that built up over time. Three factors largely explain the emergence of China’s trade surpluses: surging U.S. consumption that fueled import demand, maturation of the East Asian production sharing network centered on China, and ratcheting up of China’s savings rates.

The story of the origins of the decline in U.S. household savings rates which was then exacerbated by growing fiscal deficits and together led to the excessive demand for imports is well known and still unresolved. This part of the story has little to do with China, but reflects the political gridlock in Washington.

Yukon Huang, of the Carnegie Endowment and former country director at the World Bank, writes at The Diplomat that the U.S. “must get over” the renminbi. While it is true that China gets the low-added value side of the production chain, and that if counted properly, our trade deficits with Japan, South Korea, et al would be much higher, I think he discounts the role of Chinese state policy in perpetuating the trade deficit. The Chinese, in effect, have subsidized our consumption: all dollars that flow into export businesses must by law be surrendered to the People’s Bank of China, which then invests it right back into U.S. treasuries because it doesn’t know how to spend its money fast enough (there are already questions about the quality of the infrastructure investments China has made). This is one of the primary reasons why the Chinese savings rate is so high–because it’s Chinese state policy. Sure, the average consumer has a high savings rate because of the volatility of the Chinese market (no social security/safety net, very few safe investments so much of those savings flows into real estate or low-interest savings accounts that don’t keep up with inflation–financial market liberalization is a topic for another day). But state-enforced savings far outweigh consumer savings. This investment in Treasury bonds, in turn, aids the U.S. in taking out more debt, and ultimately, for U.S. consumers to buy more things. It’s a vicious cycle of consumption.

Huang does give the right solution, however: increased Chinese consumption. But again, he seems to think this is mostly solved by individual consumers buying more things. He does suggest the Chinese state do one thing: relax the hukou residency permit rules, so that migrant workers can feel more secure in spending more money. This is all well and good (the Chinese hukou system is draconian; the lack of labor mobility is a huge drag on the Chinese economy), but the Chinese state can do a lot more: by spending more of the money it puts into Treasury bonds! If it’s having trouble disbursing the money in the form of infrastructure investments, fine! Use it to create a viable social safety net and universal healthcare! Pay school teachers more! Invest in the Chinese people, rather than trying to build the next big infrastructure monstrosity that will fall apart in five years anyway.

I just finished reading Yu Hua’s latest novel/memoir, “China in Ten Words.” What a book. It’s one of the best China books I’ve ever read, and it’s banned in China (which is one of the reasons why it’s so good). The book, with all of Yu’s polemics and invective, is an astonishingly effective evisceration of any legitimacy to which the CCP still desperately clings. If I were to make an analogy, Yu Hua’s latest book vs. his previous novels is like Tian Zhuangzhuang’s movie “Blue Kite,” vs. Zhang Yimou’s adaptation of another Yu Hua novel, “To Live.”

The premise of the book is self-explanatory: Yu Hua surveys modern China by looking through the lenses of ten words, from “People” and “Leader” to “Revolution,” “Grassroots,” and “Bamboozle.” But the method by which he does this is creative and emotionally resonant. Each word is mainly a jumping off point for Yu’s childhood memories of the Cultural Revolution. The beginning of the book in Chapter 1 (“People”), with his memories of the Tiananmen Massacre,  are the least distressing, most innocent parts of the book. Surprised? I was too. By the time we get to “Revolution,” present-day forced evictees are throwing Molotov cocktails at the demolition crews and burning themselves to death, and childhood Yu is admiring his older brother for making the teacher cry while other teachers backstab each other and engage in class warfare-style schadenfreude. In “Disparity,” young Yu and his buddies mob and beat a villager to crack down on the illegal sale of food-rationing coupons; the villager had been saving the coupons for his wedding. Yu explains: “We got a kick out of bullying those weaker than ourselves, believing too that we were performing a public service.” (149) Space-Time and the normal associations between youth and innocence have been overturned. Yu’s reminisces bring us into the thick of what seems like some tragic nightmare that belongs to some other reality, that “Romantic and absurd comedy/cruel and all too realistic tragedy.” (116-117)

Yu’s message gradually unfolds as we progress from word to word: that modern China and the CCP are still best explained by the Cultural Revolution; that China is still stuck in a middle-school mentality of bullying, senseless brutality, and anarchy. Furthermore, this backwards political system has birthed a deformed, inane popular culture where “copycats” and “bamboozlers” are celebrated. The implication is that China’s corrupt political system keeps the country stuck in a post-modern moral and spiritual confusion that the West can at least confront with a common moral vocabulary, strong critically-minded education system, and history of democratic governance; the average Chinese citizen has none of these resources.

This message is brightened by a few brief moments of light, mainly the parts where Yu describes how reading and writing lifted his psychology out of the mind-numbing senselessness of the Cultural Revolution. Another anecdote about how the town morgue was his only refuge as a child is oddly calming. But he mainly focuses on just smashing the CCP’s legitimacy to smithereens, especially with this perfect description of modern China:

“What is revolution? The answers I have heard take many forms. Revolution fills life with unknowables, and one’s fate can take an entirely different course overnight; some people soar high in the blink of an eye, and others just as quickly stumble into the deepest pit. In revolution the social ties that bind one person to another are formed and broken unpredictably, and today’s brother-in-arms may become tomorrow’s class enemy.” (137)

If it’s any consolation, Yu ends by saying, “A bamboozler is quite likely to end up bamboozling himself or–in Chinese parlance–to pick up a big stone only to drop it on his own foot.” (221) I think if he were to make it any clearer that he hoped the CCP would bamboozle itself, this book would not only be banned but Yu Hua would find himself “disappeared.”

Ian Bremmer, President of the Eurasia Group, gives a great interview at the World Economic Forum blog, summarizing the possibilities for conflict between the U.S. and China. Currency adjustments, cybersecurity, trade disagreements, and North Korea are all mentioned, although China’s naval expansion and relations with Burma, Iran, and various states in Africa are all suspiciously left out. This, however, will never happen:

If the Chinese suddenly decide, we are moving away from the dollar and into the euro, but we are going to demand strong conditions, political and economical conditionality in return for us bailing these guys out. That could be the end of NATO. This would certainly be the end of the dollar as the world’s reserve currency, and would completely change the way we think about global geopolitics.

I cannot accept this will ever happen. NATO members would never accept any conditions that would result in the breakup of NATO. That’s because these conditions wouldn’t just result in the breakup of NATO–it would mean a significant loss of trust between the U.S. and its European allies. Who would Europe depend on then? China? That’s ludicrous.

Wen Jiabao sees Bo’s downfall as a pivotal opportunity to pin his reformist colors high while the Communist Party is too divided to rein him in. He is reaching out to the Chinese public because the party is losing its monopoly on truth and internal roads to reform have long been blocked. Ironically, he is doing so by leading the public purging of a victim who has no hope of transparent justice, because the party to which he has devoted his life has never known any other way.

That last sentence was really a great kicker to an amazing article by John Garnaut in Foreign Policy entitled, “The Revenge of Wen Jiabao.” It seems kind of sadly cruel that Bo Xilai was purged and is probably being detained in some black prison somewhere.

This is why I’m going into graduate school for IR/China Studies/International Economics and where I see my career going into the future. This question of scientistic economics vs. moral and political economy has profound implications for China, where these questions cannot even really be asked by academics. And it of course also directly affects the United States, where we need this kind of thought to combat a growing culture of ignorance and Tea Party economics. I love Michael Sandel:

“Scientistic understandings of economics detached from traditional normative questions, traditional questions of value, has a kind of momentum of its own, as if economics were a science or discipline that had graduated from, risen above, connection with mere speculation, which is what philosophers are sometimes thought to do.

And there is something very heady about that idea, of economics as a science, even like physics, for example. But I think it’s a mistake, and I think it’s short-sighted. I think the most important and creative work in the social sciences in our lifetime and in the future will be done by people who are equipped with economic training and concepts and categories but who can see beyond it, and who can reconnect economics with what used to be called moral and political economy.

You know back in the days of Adam Smith, and David Hume, and John Stewart Mill, there was one subject, moral and political economy. There was not political philosophy on the one hand and economics, the science, on the other. And I think that some of the most exciting development and new work will consist in reconnecting the normative dimensions of moral and political theory with economic analysis.

And we see this beginning in debates about globalization, for example, where the role of markets and normative questions seem very hard to leave by the wayside. So that’s one area I think in which the established social science are in need of a kind of leavening and deepening that can come if they reconnect with questions not only of policy but also values and norms, and ideals.”

via the excellent blog Understanding Society.

It’s funny that China is already Saudi Arabia’s biggest customer, because it was the United States who first convinced the Saudis to guarantee oil  with the Chinese in order to gain China’s support for economic sanctions against Iran.

This one sentence was just in a list of unfinished drafts I have for the blog; no links present. Occasionally I’ll start something and never finish, coming back to it months later to find the tidbit was actually interesting.